DUBAI, Oct 10 (Reuters) - Gulf stock markets were generally weak in early trade on Tuesday with telecommunications companies weighed down by the Iraqi government saying it would seek control of Kurdistan-based mobile phone operators.

On Monday, Iraq’s central government said it would seek to have mobile phone firms move their headquarters to Baghdad after last month’s referendum on Kurdish independence, which it refuses to recognise.

In response Kuwaiti telecommunications firm Zain, parent of Zain Iraq, sank 4.3 percent in heavy trade. Zain Iraq is based in Baghdad, but the dispute raises the prospect of disruption to all operators’ Kurdistan business. Iraq was the single biggest contributor to Zain’s revenues last year.

Zain said on Tuesday it had signed a deal to sell and lease back more than 1,600 telecommunications towers worth about $165 million. The company said it expected to complete the deal in the first quarter of next year. However, the deal’s size appeared too small to have a major impact on profits.

Omantel, which said earlier this week it had signed a non-binding letter of intent to buy a further 12 percent of Zain from Kuwait’s Al Kharafi family, dropped 2.5 percent.

In Qatar, Ooredoo, which also has an Iraqi telecommunications subsidiary, edged down only marginally; Iraq accounts for around 15 percent of its group revenue. Qatar’s index, which had rebounded 0.9 percent on Monday, declined 0.1 percent.

Saudi Arabia’s index was down 0.2 percent after an hour of trading. Bank Aljazira plunged 8.8 percent after announcing that it would resubmit a request to the regulator for approval of a 3 billion riyal ($800 million) rights issue; it appointed Alinma Investment and JP Morgan Saudi Arabia financial advisers. A rights issue would dilute existing shares.

Insurer Metlife AIG ANB Cooperative Insurance surged 4.0 percent on having been requalified for three years by the health insurance industry’s regulator.

In Dubai, builder Drake & Scull, the most heavily traded stock in recent days, fell 2.1 percent after four straight days of strong gains. The stock had been surging since last Wednesday, after the firm completed a capital restructuring.